The consumer price index for December was in line with expectations, with headline CPI printing at 2.7% year-over-year, consistent with the 2.7% forecast (unchanged from November’s 2.7%). Core CPI (which excludes food and energy and may better reflect underlying inflation trends) came in at 2.6% compared to consensus 2.7% (unchanged from November’s 2.6%).
The ABA Office of the Chief Economist believes today’s reading supports the notion that inflation has not reaccelerated, providing some additional flexibility for the Fed to support the labor market. For banks, this could bolster credit quality and loan demand.
